Opinion
W.C. No. 4-157-456
March 13, 1996
FINAL ORDER
The respondents seek review of an order of Administrative Law Judge Wheelock (ALJ) dated November 6, 1995, which imposed penalties under § 8-43-304(1), C.R.S. (1995 Cum. Supp.), for the Colorado Compensation Insurance Authority's (CCIA) failure timely to share medical reports. We affirm.
This matter was previously before us. In an order dated December 6, 1994, the ALJ imposed a penalty of $50 per day from July 1, 1993 to September 14, 1993. The ALJ's order was based upon her determination that the CCIA failed to provide the claimant with Dr. Sceats' June 16, 1993, and August 6, 1993 medical reports within the time provided by the Rules of Procedure. We concluded that the ALJ's findings of fact did not reflect consideration of the applicable legal standard. Specifically, in Colorado Compensation Insurance Authority, Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995), cert. denied December 4, 1995 (Sallee), the court concluded that the imposition of penalties under § 8-43-304(1) is governed by a "negligence" standard based upon whether a reasonable insurer would have taken the same action under similar circumstances. Therefore, we concluded that the ALJ's order was insufficient to permit appellate review, and remanded the matter for entry of a new order reflecting consideration of the applicable legal standard to the facts of the claim.
Our order of remand specifically directed the ALJ to determine whether the CCIA's failure to provide Dr. Sceats' medical reports within fifteen days as required by the Rules of Procedure, Part XI(B)(2), 7 Code Colo. Reg. 1101-3 at 39 (1995), was "objectively reasonable." Relying on Tozer v. Scott Wetzel Services, Inc., 883 P.2d 496 (Colo.App. 1994) we also stated that the "reasonableness" of the CCIA's conduct was dependent on whether the CCIA's actions were predicated on a rational argument based on law or fact.
On remand, and without further hearing, the ALJ issued her November 6 order. The ALJ implicitly incorporated her December 6 findings of fact. The ALJ also determined that the CCIA's failure timely to provide Dr. Sceats' medical reports to the claimant was not based on a rational argument in law or fact. Further, the ALJ determined that the CCIA's failure to take the action a reasonable insurer would take, justified the imposition of the penalty set forth in the prior order dated December 6, 1994.
On appeal the respondents contend that the ALJ's assessment of penalties is not supported by the record or applicable law. The respondents also argue that the ALJ's order violates the Eighth Amendment of the United States Constitution because it imposes an "excessive" fine, and violates the due process clause of the Fourteenth Amendment. We reject these arguments.
We do not have jurisdiction to resolve the respondents' constitutional challenges to the imposition of penalties under § 8-43-304(1). Kinterknecht v. Industrial Commission, 175 Colo. 60, 485 P.2d 721 (1971); Celebrity Custom Builders v. Industrial Claim Appeals Office, ___ P.2d ___ (Colo.App. No. 94CA1937, June 15, 1995). In any case, the Court of Appeals considered and apparently rejected similar arguments by the CCIA in Pueblo School District No. 70 v. Toth, ___ P.2d ___ (Colo.App. No. 95CA0189, January 25, 1996), and we are bound by published opinions of the Court of Appeals. C.A.R. 35(f).
Similarly, in Sallee and Toth the Court of Appeals rejected the CCIA's argument that the imposition of penalties under § 8-43-304(1) requires proof of some "intentional conduct" beyond "simple negligence." Therefore, we reject the respondents' contention that the ALJ applied the wrong legal standard.
Next, the respondents rely upon the testimony of the CCIA's adjuster, Mr. Ortiz, and argue that their failure to timely provide Dr. Sceats' reports was predicated on a rational argument in law. The respondents' argument is based upon the adjuster's testimony that he failed to provide Dr. Sceats' correspondence to the claimant because he did not consider Dr. Sceat's "letters" to be "medical reports" within the meaning of the Rules of Procedure. (Tr. pp. 29, 36-38).
However, the ALJ was not required to credit this portion of the adjuster's testimony, and it is apparent that the ALJ was not persuaded that the CCIA's actions were predicated on the adjuster's mischaracterization of Dr. Sceats' reports. See General Cable Co. v. Industrial Claim Appeals Office, 878 P.2d 118 (Colo.App. 1994) (ALJ not required to make findings of fact on every piece of evidence, just the evidence found to be persuasive and determinative); El Paso County Department of Social Services v. Donn, 865 P.2d 877 (Colo.App. 1993). Instead, the ALJ credited the adjuster's testimony that Dr. Sceats' June 16 report was received at the CCIA on June 21, 1993, but he did not see the report until July due to mail delivery procedures within the CCIA. (Tr. pp. 37, 38; December 6, 1994, Finding of Fact 11).
We may not interfere with the ALJ's credibility determinations. May D F v. Industrial Claim Appeals Office, 752 P.2d 589 (Colo.App. 1988). Moreover, the evidence the ALJ found persuasive, supports the ALJ's conclusion that the CCIA's actions were not predicated on a rational argument in fact or law. See Pueblo School District No. 70 v. Toth, supra.
To the extent that the ALJ's oral finding concerning the adjuster's mischaracterization of Dr. Sceats' reports is inconsistent with her written findings of fact, it is the written order which is the subject of our review. See Wait v. Jan's Malt Shoppe, 736 P.2d 1265 (Colo.App. 1987). Consequently, we need not consider whether the mischaracterization of a physician's "letter" is a rational argument in law for the failure to share the letter with the claimant.
The respondents also contend that they are not subject to penalties, in view of the evidence that they "cured" the violation pursuant to subsection 8-43-304(4), C.R.S. (1995 Cum. Supp.). In so asserting, the respondents acknowledge that subsection 8-43-304(4) was added effective June 1, 1994. The respondents also recognize that in Wells v. Town of Breckenridge, W.C. No. 4-129-859, May 18, 1995, we concluded that subsection 8-43-304(4) is substantive and does not apply to injuries, such as this, which occurred prior to June 1, 1994. See Colorado Compensation Ins. Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995), cert. denied December 4, 1995 (the imposition of penalties is a substantive right governed by the law in effect on date of injury). However, the respondents argue that Wells was wrongly decided.
As stated in Wells subsection 8-43-304(4) modifies pre-existing liability for penalties by establishing a "right to cure." The amendment provides that where the violating party proves that the violation was cured within twenty days of an application for hearing on the issue of penalties, the party seeking penalties must then prove that the violator had actual or constructive knowledge of the violation. If the moving party fails to sustain its burden of proof the violator is not subject to penalties. No such requirements existed prior to June 1, 1994.
Accordingly, we adhere to our prior conclusion that § 8-43-304(4), does modify the claimant's substantive right to penalties, by adding elements of proof not previously required. Therefore, the "curing" provisions in subsection 8-43-304(4) are not applicable to this claim.
Lastly, we reject the respondents' argument that the penalty imposed by the ALJ should be set aside as "excessive." Under § 8-43-304(1) the ALJ has discretion to impose penalties up to $500 per day for each day, and each violation of the respondents' duty to provide medical reports to the claimant. See § 8-43-305 C.R.S. (1995 Cum. Supp.). We may not disturb the amount of the penalty imposed by the ALJ unless it is an "abuse of discretion." Hall v. Home Furniture Co., 724 P.2d 94 (Colo.App. 1986).
Here the ALJ only imposed a penalty of $50 per day and did not impose a separate penalty for each of the two medical reports the respondents failed timely to share with the claimant. Consequently, even if we accept the respondents' assertion that the claimant was not substantially harmed by the late receipt of Dr. Sceats' reports, we are not persuaded that the penalty imposed by the ALJ exceeds the bounds of reason. Coates, Reid Waldron v. Vigil, 856 P.2d 850 (Colo. 1993) (abuse of discretion standard includes consideration of whether the ALJ's order is supported by the applicable law).
Similar to the circumstances in Toth, we perceive the ALJ's imposition of penalties at a rate of $50 per day as an attempt by the ALJ to get "the CCIA to take notice and reflect upon its course of conduct, without being unduly heavy-handed." (Tr. pp. 51-53). Therefore, we decline to conclude as a matter of law that the penalty constitutes an abuse of discretion. See Rosenberg v. Board of Education of School District #1, 710 P.2d 1095 (Colo. 1985).
IT IS THEREFORE ORDERED that the ALJ's order dated November 6, 1995, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
_____ David Cain _____ Kathy E. Dean NOTICEThis Order is final unless an action to modify or vacate this Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, CO 80203, by filing a petition for review with the court, with service of a copy of the petition upon the Industrial Claim Appeals Office and all other parties, within twenty (20) days after the date this Order is mailed, pursuant to section 8-43-301(10) and 307, C.R.S. (1995 Cum. Supp.).
Copies of this decision were mailed March 13, 1996 to the following parties:
Vance L. Hewuse, 6385 Georgetown Court, Colorado Springs, CO 80919
Diversified Veterans Corporate Center, 2315 N. Weber, Colorado Springs, CO 80907-6948
Curt Kriksciun, Esq., Colorado Compensation Insurance Authority — Interagency Mail
George Ortiz, Colorado Compensation Insurance Authority — Interagency Mail
Michael S. Kocel Esq., 2301 E. Pikes Peak, Colorado Springs, CO 80909
(For the Claimant)
Barbara Carter, Special Funds Unit-Interagency Mail
BY: _____